The election has passed, and the Democrats have won a majority in both the House and the Senate. What will this mean for the next two years?
On the short term, it may well mean an old fashioned Mexican Standoff. The Democrats control both houses, and thus can pass any legislation they like, or defeat any Republican-introduced legislation. However, they lack the two-thirds majority in both the House and the Senate, which they would need to override a presidential veto on legislation the Democrats may pass. Thus, the Republicans can't get any legislation through either the House or the Senate without Democrat blessing, while the Democrats can pass any legislation they want, but can't override Bush's veto of it.
In short, neither party can get anything done without the consent of the other. Either the two parties can either play nice with each other in the "spirit of bipartisanship", or we have ourselves a classic Mexican Standoff. And, judging by the volume of attack advertising, smear jobs, and negative campaigning by both parties in this election, I think we are about as far from "bipartisanship" as we can get.
Over the next two years, I expect the US Government will be largely mired in deadlock, fruitlessly debating bills only to see them fall to either defeat or veto. Very little real work will get done, as the two main parties will use each bill as its next move in a grand chess game leading up to the next election. The Republicans will introduce bills they hope the Democrats will defeat, so they can score points with some constituents. Meanwhile, the Democrats will create "omnibus" bills, tacking their favorite elements of their political platform onto critical, popular, or politically sensitive bills - and since the President lacks a line-item veto, Bush can either sign the bill, or veto the whole thing, risking the damage this could do to the Republicans in the next election.
I expect the next two years will likely be very unproductive for the US government, and will likely be regarded as Bush's lame duck years.